What Happened?
Shares of online grocery delivery platform Instacart (NASDAQ: CART) fell 6.6% in the afternoon session after Amazon expanded its same-day grocery delivery service and a critical report surfaced about the company's pricing practices.
The stock faced pressure from two fronts. First, competitor Amazon announced the expansion of its same-day perishable grocery delivery to over 2,300 cities, signaling intensified competition in the sector. At the same time, a new investigation accused the delivery company of manipulating grocery prices. A report from Groundwork Collaborative and Consumer Reports found that Instacart's pricing system showed different prices to different customers for identical items from the same stores. The study noted that basket totals could vary by an average of 7%, potentially costing families as much as $1,200 a year, which could harm trust in the service.
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What Is The Market Telling Us
Instacart’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 22 hours ago when the stock gained 6% on the news that the company launched an embedded shopping and checkout app inside ChatGPT, making it the first grocery partner to offer such a feature. This integration allowed users to discover recipes, create grocery lists, and complete the entire checkout process without leaving the chat conversation. The new app connected ChatGPT's capabilities with Instacart's fulfillment and delivery network. According to a statement from Morgan Stanley, this move gave Instacart an early lead over competitors like Walmart and Amazon, neither of which had a similar grocery feature available on the AI platform. The announcement was consistent with the company's focus on growth through partnerships, as its CFO noted Instacart would continue to "lean into" collaborations.
Instacart is flat since the beginning of the year, and at $43.16 per share, it is trading 18.8% below its 52-week high of $53.15 from February 2025. Investors who bought $1,000 worth of Instacart’s shares at the IPO in September 2023 would now be looking at an investment worth $1,281.
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